Markets did another minor uptick but retraced most of its gains near day end on friday. Markets did go above my original short positions at 1333-1330 and I added to shorts when we traded there. We are still in a very steep bearish rising wedge and a breakdown of this should take us lower next below 1250 SPX. I still believe we are going to take out the 1250 and the copper is showing a clear HS pattern where it will breakdown of it soon.
If copper is any leading indicator watch out for markets to fall down this comming week. We have ECB with rate hikes comming this week, not much economic data , but everyone has priced in a rate hike in EU, so might be a sell off after news.
Also watch MENA countries , Japan and comments to QE2/QE3 which could make the dollar breakout and the markets breakdown.
Overall still heavy short and markets did close below resistance 1333 and we closed 1332 - that was not bullish for the bulls as we did not close above the resistance, but below. We should start already this monday with a nice decline. The VIX made a hollow red bar , which is bullish and a start of a new uptrend. Markets overbought again and the VIX got oversold on daily chart - ready for another move higher.
30 min chart still a TRIPLE bearish divergence if not 4 times.. MACD making higher highs 4 times but MACD 4 times lower lows - that is VERY bearish. VXX have a triple bullish divergence also telling that fear should come into markets again.
Keep a close watch on thet bearish rising wedge - cause when we break below the support we are on the way back below 1250.
Have a nice week
Do you have a target date for 1250?
ReplyDeleteThe upside from here is very limited....the downside is +90%
ReplyDeleteyes, I truly think we will see a DOW below 3000...and probably below 1000.
Hard to tell , but target date would be in next 2 weeks. So around mid April , we should trade below 1250 SPX
ReplyDeleteA few other blogs that I have been following are expecting a pull back down to the March 11th lows by mid April, before reversing to the 1350s area before we really fall apart? But, perhaps this will evolve into what Atilla said "the market top will fool the best of the best" and we just keep dropping on the buy the dip crowd? I really don't know, but appreciate your blog and efforts. 100 percent short over the weekend. Thanks
ReplyDeleteWe could trade up this week (although unlikely IMO, but in this market I don't dare to say it)
ReplyDeleteBut in my opinion, one's the selling starts it will be much more ferocious than what most people are used to.